A Logistical Breakdown Of Cost Of EHR Implementation for Healthcare Organizations

Rapid advancements in the healthcare technology landscape have resulted in massive popularity of digital information storage methods among hospitals, medical practices and other healthcare facilities. 

Under the American recovery and reinvestment act (ARRA), all public and private healthcare providers and other eligible professionals were required to adopt and demonstrate meaningful use of electronic medical records. This mandate further spurred the adoption of EMR and EHR software. 

EHR/EMR software solutions make it easier for healthcare providers to manage patient’s medical records while automating clinical workflows. Electronic health records offer a wide range of benefits such as improved patient care, increased efficiency, and better data management. However, implementing an EHR system can be a significant investment for healthcare organizations, and it’s essential to understand the cost breakdown of this process.

Table Of Contents

  1. Cost of EHR Implementation in 2023
  2. EHR Implementation Cost Breakdown
  3. Budgeting for EHR Implementation
  4. How Medical Practices Can Bring Down The Cost Of EHR Implementation
  5. Benefits of Custom EHR Software Development
  6. Time Frame For EHR System’s Implementation

Cost Of EHR Implementation in 2023

There is a lot of hubris in the mind of healthcare practice owners when it comes to the cost of EHR implementation. There is also the question of whether it makes more sense to implement an off-the-shelf EHR software or get one custom built for your practice from a financial standpoint. 

The cost to implement an EHR system can vary depending on several factors such as the size of the healthcare organization, the complexity of the EHR system, the customization required, and the vendor chosen.

Before we dive deep into the EHR implementation cost breakdown and do a cost-benefit analysis of the same, let us first understand the difference between on-premise and cloud hosted EHR solutions since the EHR implementation cost varies for both of them. 

Cloud-based EHRs

In cloud-based EHRs, your data is kept on the vendor’s servers and you have access to it online. A continuous subscription charge is included in this model and is paid either monthly or yearly. 

You might incur upfront charges (although they won’t be nearly as high as an on-premise fee) in addition to the subscription if you decide to implement a cloud-based EHR.

Naturally, since the vendor will handle hosting, you won’t have to pay for additional servers, storage, data reserves, security, or the like. However, the number of your employees that have access to the program may impose restrictions on you. You may occasionally have to pay a higher subscription price as the user base expands.

On-premise EHRs

Deploying electronic health records on-premise, or hosting the EHR solution on your own servers, is another method of purchasing electronic health records. 

This necessitates the acquisition of a permanent license, which frequently involves paying a hefty up-front cost. Additionally, in addition to the software requirements, hardware acquisition costs also pile up higher in case of on-premise EHRs as compared to cloud hosted EHR.

If you choose an on-premise server setup, you’ll be responsible for maintaining all of the back-office IT required to run the EHR. This covers powerful servers, a data backup method, data storage, and perhaps other technologies as well.

EHR Implementation Cost Breakdown

While the major component that needs to accounted for when setting up an EHR is the upfront cost but there are many other factors that need to be taken into consideration as well such as EHR maintenance cost, training costs, and other hidden costs. EHR costs can be broken down into the following three major components.

1. Direct Costs

Depending upon whether you are choosing a cloud-based or on-premise EHR, the direct EHR implementation costs will greatly vary. The upfront costs also depend on whether you choose to custom develop the EHR software or choose an off-the-shelf EHR solution. 

The average multi-physician practice will spend about $162,000 to establish an EHR with $85,000 contributing to first-year maintenance expenditures, according to a Health Affairs research. Even though the estimate dates from the early days of EHR implementation, it still offers a framework and a general notion of how much you should budget.

For each full-time employee, practices that adopt an EHR system can anticipate receiving an average of around $23,000 in net benefits annually after paying off their EHRs initial investment in about two and a half years.

Keep in mind that not all EHR solutions will cost the same because of many variables that may influence your final bill. So, depending on whether you choose an on-premise or cloud EHR, custom develop or purchase an EHR, your costs will change. Regardless of the strategy you choose, you might need to make another big investment.

2. Indirect Costs

Indirect EHR costs must be taken significantly into account in addition to initial and standard implementation costs. The overall cost of adoption, which includes these hidden EHR costs, is substantial.

For instance, you frequently need to allocate money in your implementation budget for EHR training. Although providing your doctors and workers with the right training may appear pricey, cutting corners could end up costing you more in the long run as they struggle to do their tasks. Don’t skimp on thorough training for individuals who require it because you’ll end up saving money.

Be aware that your doctors will be less productive than they were before for a short period of time after an EHR installation. Since you’ll want to acquaint your staff with the program rather than rushing it and running the risk of blunders, this is almost inescapable.

For up to six months after EHR deployment, it’s typical for doctors to see one fewer patient each day. After this adjustment period, productivity is anticipated to increase. Calculate the financial impact on practice productivity to be ready for both the best and worst case scenarios.

3. Staffing-related Costs

The extent to which you’ll need to reorganize your IT workforce after the EHR software goes live is yet another factor to take into account. Even if your practice only has a few small IT requirements, think about whether you’ll need additional IT support during implementation.

Nearly every medical practice must maintain some IT resources (such practice management software or email servers) available 24/7, and maintaining these systems is labor-intensive. On-premise systems normally need your own IT team, but the majority of cloud-based providers offer their own technical support.

Budgeting for EHR Implementation

It can be challenging to obtain an exact estimate of the EHR implementation cost because it depends on the particular features and needs your practice requires. System types including web-based and on-site systems have different implementation costs. Additionally, whereas a cloud-based program requires a membership cost, an on-site system merely needs ongoing management and support.

When preparing for EHR adoption, you must budget for the following six essential elements:

1. Software licensing: One of the most significant costs associated with EHR implementation is the software licensing fees. Healthcare organizations need to purchase a license to use the EHR systems. The cost of the software license can vary depending on the number of users, the features required, and the vendor chosen.
2. Hardware and infrastructure: To support an EHR system, healthcare organizations must have the necessary hardware and infrastructure in place. This includes servers, workstations, and network equipment. Depending on the size of the healthcare organization, the cost of purchasing or upgrading the hardware required can be substantial.
3. Implementation services: For EHR adoption, healthcare organizations must work with the EHR vendor or a third-party consultant. The vendor or consultant will charge a fee for installing and configuring the EHR system. The cost of implementation services can vary depending on the complexity of the system, the customization required, and the EHR vendor chosen.
4. Training: Training is an essential aspect of EHR implementation. Healthcare staff requires comprehensive training on how to use the EHR system effectively. The cost of training can vary depending on the number of staff members who require training, the complexity of the EHR system, and the vendor chosen.
5. Data migration and integration: Healthcare organizations often have existing patient data that must be transferred to the new EHR system. The process of transferring data from existing systems into the new EHR system is called data migration. Additionally, healthcare organizations may need to integrate the EHR system with other healthcare IT systems. The cost of data migration and integration can vary depending on the complexity of the process and the vendor chosen.
6. Maintenance and support: After implementation, ongoing maintenance and support services are required to ensure that the EHR system runs smoothly and to address any issues that may arise. The maintenance costs and support services can vary depending on the vendor chosen and the level of support required.

It’s worth noting that there may be additional costs associated with EHR implementation, such as regulatory compliance and security requirements. For example, healthcare organizations may need to ensure that their electronic health records meets HIPAA (Health Insurance Portability and Accountability Act) compliance standards to protect patient privacy and confidentiality. 

However, when you partner with EHR software developers like Arkenea, that specialize in the healthcare sector, to get your custom EHR solution developed, the costs associated with ensuring regulatory compliance and the subsequent risks associated with noncompliance are drastically reduced. 

How Medical Practices Can Bring Down The Cost Of EHR Implementation?

Cloud based EHR systems are gaining popularity due to the convenience they offer. However, direct upfront costs of implementing a cloud-based EHR software goes upwards of $150k in software licensing costs that are charged on a monthly or annual basis. In fact, leading EHR software such as Epic EHR can cost up to $500k in annual subscription fees. Add the maintenance and indirect costs associated with it and the resulting figure becomes too high to be profitable in the near term. 

With the costs of EHR implementation being so high, it raises the question of whether custom development of bespoke EHR software is a better decision from the financial standpoint. A cost benefit analysis between the two goes in the favor of custom EHR development. 

Depending on factors such as the feature set, technology stack, size and experience of the development team, timeline of software development, the cost of developing custom EHR software begins from $100,00. While the upfront costs of software development may seem higher, the benefits clearly outweigh the cost and time invested in the same. 

To know exactly how much custom developing an EHR software from scratch would cost based on your exact requirements, get in touch with our team for a free consultation today. 

Benefits of Custom Development Of EHR Software

EHR software tailored to your unique needs

Unlike off-the-shelf EHR systems that may require you to change your existing workflows, custom software is developed as per your needs. This not only streamlines the software adoption, but also reduces the severity of the initial adjustment period in which you would likely see a loss in productivity as a result of implementing EHR systems. Additionally, an EHR for a specialty practice such as dermatology, cardiology or dentistry would require different input fields and custom forms within the EHR. This can be easily achieved through a custom developed EHR software. However, in case of market-ready EHR systems, such customization options are either limited or come with a hefty additional cost.

Feature set that you need

The existing EHR software solutions readily available in the market are designed to cater to a wide range of audience as a result of which they are often bloated. Users are often riddled with features that are of no real consequence to them. Despite not needing those features, they end up paying the entire cost of bloated software. The converse is true as well. Because of the generic nature of EHR software available, you might end up missing a set of features that you need in your practice. Custom development ensures that your software only has features that you need. Additionally, taking a MVP-first approach can result in a scalable EHR software that grows and adapts to your practice needs at a fraction of cost.

Improved adoption rates and interoperability

As opposed to market ready EHRs, custom software is generally better received by the internal staff since it is designed according to the existing processes and comes with a lower learning curve. The improved adoption rates and ease of use contribute in bringing down the indirect costs of EHR implementation. Additionally, custom developed EHR software is designed to be capable of integrating 

Lower cost of EHR adoption

While it may seem counterintuitive, implementing custom developed EHR software is a more cost effective alternative than adopting existing EHR software solutions. Both direct and indirect costs of EHR implementation are reduced. The monthly and annual subscription fees are replaced by one-time development fees. While the difference in direct costs are easy to compute, the indirect EHR implementation costs are also reduced, making it a better alternative over choosing existing EHR/EMR software. 

Time Frame For EHR system’s Implementation

The time required to develop custom EHR software depends on the scope and complexity of the system being developed. The EHR system’s implementation will take anywhere from 60 to 120 days. 

The vendors need to make sure the jobs are finished on time and that all deadlines are reached in accordance with the implementation strategy. Every user utilizing the EHR system needs to be informed of any upgrades via the shared system. Additionally, go-live data for every step of the implementation process must be included in the EHR implementation plan.

Having a target is crucial since the data changes depending on how the system is configured and how the workflow is adjusted. The review, development, and planning for the launch of the EHR will take at least a year, according to studies in healthcare IT. Also bear in mind that it will take a few months to implement a cloud-based EHR system.

The workflow processes need to be modified and improved when the EHR system is introduced. To ensure HIPAA compliance for software development and other requirements, processes and policies must also be updated and modified. Overall, a successful EHR system adoption will increase income and automate a number of administrative, clinical, and financial instruments.

The key to a successful EHR adoption and implementation is user centric design, well planned software that runs in accordance to the organizational workflows and enables detailed functional documentation.

Conclusion

Implementing an EHR system can be a significant investment for healthcare organizations. Understanding the cost breakdown of this process is essential to plan and budget effectively. While the cost of developing and implementing an EHR system may seem high, the benefits that EHR systems offer, such as improved patient care and increased efficiency, can be well worth the investment.

Arkenea offers custom EHR/EMR software development services that focuses on security and interoperability for your healthcare enterprise. If you are looking for bespoke solutions that seamlessly integrate with the practice management tools that your facility uses, get in touch with our team to discuss your requirements further.